Attempts to satisfy the objectives of shareholders and regulators requires the bank to use the same duration match in the protection of net worth from interest rate risk.

Question

Quizplus · Accepted Answer

Banks often use a variety of methods, not just duration matching, to protect net worth from interest rate risk while trying to satisfy both shareholders and regulators. These methods can include asset-liability management, derivatives, and other financial instruments to manage and hedge interest rate risk.

Attempts to Satisfy the Objectives of Shareholders and Regulators Requires